The secret billionaire

Who is Terry Matthews? He owns the biggest hotel in Wales. He is a serial entrepreneur who is as rich as Branson. And he may also be the most competitive man in Britain

For a man who says he hasn't got time to give interviews, Terry Matthews, rated as the sixth-richest in Britain, is certainly outspoken. "I'm hard-core solid stone," he once said. "I take a spoonful of concrete with my cereal ... You will hate me if you take me on, because I will be there long, long after you have gone.'' Terry Matthews also likes to win, and to be the best and the biggest at whatever he does.

For a man who says he hasn't got time to give interviews, Terry Matthews, rated as the sixth-richest in Britain, is certainly outspoken. "I'm hard-core solid stone," he once said. "I take a spoonful of concrete with my cereal ... You will hate me if you take me on, because I will be there long, long after you have gone.'' Terry Matthews also likes to win, and to be the best and the biggest at whatever he does.

But most of all he likes to work and to create companies. Not just any companies, but multi-million pound, hi-tech operations such as Mitel and Newbridge Networks, and he thrives on nurturing a dozen or so lesser corporate operations, interspersed with triggering off a smattering of start-ups.

The 57-year-old engineer has also found time to conceive and construct a £120m hotel in his native Wales. And because he is the kind of man that puts the big into business that hotel, of course, is the biggest in the Principality, with the biggest spa of its kind in Europe, and a £10m golf clubhouse that is the biggest in the golf world, with three championship courses, and a fourth in the pipeline.

Mr Matthews, in a rare analysis of his management philosophy, once told a gathering of businessmen in Canada: "The secret of building a successful firm is to hire good people and put them under pressure - and I'm very good at that.'' Former colleagues say he is an irresistible mix of ruthlessness, dynamism, humour and brashness. "He is very vivacious, a tremendous storyteller," says one former colleague. "Very explosive. He enjoys a good cigar, a fine cognac and a good meal."

An American who has worked with Mr Matthews says: "He's a great entertainer, a hell of a host, and a bit of a joker. He once gave a guy a fake sheep and a pair of wellington boots for a birthday present. It brought the house down when he took it out - and he had carried it all the way from New Zealand."

Forbes Global magazine puts the Matthews personal fortune at £1.27bn. But in the last month he may have become the fourth-richest in Britain after a deal which gave him a holding in multi-national Alcatel worth an estimated £1.32bn. Yet while his fellow billionaires in the top 10 are high-profile names including the Duke of Westminster, Sir Richard Branson, David Sainsbury and Bernie Ecclestone, Mr Matthews is little-known outside the computer networking business and his home town in the south Wales valleys. That is the way he likes it.

Mr Matthews shuns personal publicity and has said he's proud that unlike Sir Richard he can walk into a restaurant without being recognised. He never talks about his family - wife, Ann, three sons and a daughter - or his personal life, and any interview he has given has had a strategic purpose, such as the opening of his hotel or his ongoing campaign to attract the Ryder Cup to his Welsh hotel and leisure complex in 2006. The folk history of Newbridge, his home in Gwent then at the heart of the soon-to-be-defunct coal mining industry, is rich in tales of his early years, depending upon which story is being told by which ex-school friend.

They say Terry Matthews was destined to be a fixer, repairing things for friends and family at the age of seven, five, or even four, when, folklore has it, he took a a neighbour's clock to bits and got it going again.

After that start, the young Matthews, it appears, applied himself with the zeal of a technological missionary to the repair of cars, bikes, engines, and almost anything in Newbridge that had stopped moving. He stripped them down, and put them back together again so they worked better than they ever had. Engines, bikes - even the clocks, say cynics - went faster. At 16 he offered his precocious fix-it-all talent to the Post Office who hired him as a trainee in what was to become the BT research labs. While there, he notched up an HNC in mechanical and electrical engineering at night school, and followed it with a degree in electronics from the University of Wales.

After graduating he went to Canada when he was 26 for what was intended as a holiday, but that was the start of his rise to riches. He heard of vacancies at Microsystems International in Ottawa, Ontario and joined as an electronics engineer working on integrated circuits and other projects.

He was quickly disillusioned and frustrated with the management and quit after three years to start his own company. With fellow ex-patriate Michael Cowpland - now boss of the software company Corel Corporation in Canada - he set up Mitel in 1972. It started as a consultancy, but Mr Matthews reckoned the serious money was in finding and making the right product for the then-booming telecoms industry. Mitel was soon to become a world leader in producing integrated circuits and private switchboards, inventing first PBX (private branch exchanges) which enabled smaller companies to have their own mini-networks.

In each successive year after its launch, Mitel doubled its revenue, and by the end of the 1970s it had reached more than £200m. In 1985, BT bought a controlling 51 per cent interest in Mitel and Mr Matthews moved on with a reputed 6.5 million shares in the company worth around $80m.

The following year he set up Newbridge Networks based in Ottawa, later hiring key people from Mitel. His initial aim was to design data networking equipment that was universally compatible within the industry. By all accounts, the early days were a rollercoaster as Mr Matthews moulded Newbridge into the image he wanted in a tough commercial arena, fighting established US rivals.

"We did whatever we had to do,'' said Pat Power, one of Newbridge's first employees who went on to become CEO of Stepping Stone Corporation. "That was our mandate - to nuke out the competition."

Spurred by the Matthews charisma, enthusiastic executives worked double shifts, finishing their day job, then moving over to help on the manufacturing side. Some were not used to the work. One tale has the company's vice-president of administration, Don Mills, one hard-pressed evening absent-mindedly reaching up to scratch his nose and managing to solder his lips together.

Bert Hill, technology specialist with The Ottawa Citizen, says: "Matthews is dynamic. It's go-go-go all the time, full of self-confidence, brash, always got a million balls in the air, buying real estate, setting up companies. He's a whirlwind." Other labels attached to him over the years are pugnacious, impatient, tough, and volatile, as well as visionary, genius and the predictable tabloidese "Welsh wizard".

In those early days of Newbridge, Mr Matthews put $14m of his own money into product development and in the first year the company recorded US$1.3m sales. The main obstacles to progress seemed to be the American heavyweights dominating the sector. But Mr Matthews works best with his back to the walls, sleeves rolled up, facing a challenge. And the bigger the challenge, the bigger the buzz.

Another business acquaintance said: "People worked hard and he had - has - this habit of calling after midnight to talk things through. At the end of the conversation, he'd say he wanted a résumé or a specification by the morning. It was worse when he was out of town. You knew he'd be brooding and you knew that call would be coming. Life was fast and furious, but it was fun. We worked hard and we partied hard. For Terry the world did - and does - revolve around engineers. The rest don't matter."

There were many rewards for working with Terry Matthews. Workers enjoyed free pizzas and beers, along with shares, and Mr Matthews revelled in the job, especially working alongside fellow engineers. Rumour has it that the free food and booze was stopped only by accountants aghast at the amount of freebies consumed by the workforce.

Mr Matthews has always bonded with fellow engineers. "There are a lot of engineers and scientists in our community and that encourages me," he said in a rare interview. "They are the sort of people I like."

The hectic pace at Newbridge began to pay off and the beginning of real success came with the realisation that the company had two strategic advantages over the opposition. One industry analyst says: "First, it was practically the only firm in the industry with knowledge of European technical standards, which was gained from Mitel. Second, its engineers all had extensive backgrounds in telecoms, unlike the US competitors who were from the computer business."

But as the company prospered, Mr Matthews evolved a different way of working. Instead of buying up companies, he developed a system of evolving what he called affiliates. More than 20 have been developed, some sold on, others brought to market.

"Instead of losing good people to Cisco, he bankrolls them to develop a company which gets bolted onto Newbridge and these guys get to run their own shops," says the Citizen's Mr Hill. "He likes building things from the ground up and staffing them with loyalists.''

When Newbridge, which was floated in 1989, took off, it grew to employ more than 6,000 people on six continents, with blue chip customers which included the 350 biggest telecoms companies in the world and more than 10,000 corporations and government agencies. By 1993, revenue was topping $307m, and by 1994, the year he was awarded an OBE, that was up to $550m.

In the late 1990s, speculation began to mount that Newbridge was likely to be taken over, and at the end of May this year, the Paris-based multinational Alcatel completed its acquisition of the company. The deal left Mr Matthews as Alcatel's biggest single stockholder with 3 per cent, worth around $2bn.

Mr Matthews still has Telexis, a Newbridge affiliate selling innovative engineering solutions to the telecoms industry. He also still runs Celtic House, a venture capital outfit for embryonic IT companies.

And there is the Welsh hotel business, the Celtic Manor, a huge leisure venture. But despite his hotel involvement, there are suspicions in the business that Mr Matthews will not long be able to resist mixing it again with the other big boys of world telecoms.

His recent soundbites also indicate the peace won't last. "Never stand still, that's my philosophy in life," went one. "Make a mark, don't be part of the living dead", tells you he's far from that. "Don't be ordinary", as if he was. "If you can do something that is significant, why fool around with something small", though small's a word that's alien to him. "God, it would drive me berserk to do nothing", and certainly anyone around him. "I can't stand people who do nothing'', not that they'd have much chance to get away with less than a 110 per cent effort.

What motivates this obsession with success and almost pathological dislike of things ordinary is not clear, but Dick Foss, Mr Matthews' first boss in Canada and founder of Mosaid Technologies thought he knew what drove the man from Newbridge.

"I left school like Terry at 16," he says. "I had a fair-size chip on my shoulder, and the Welsh are noted for chips on their shoulders. Terry's probably got a whole forest there. That creates drive and an, 'I'll show the buggers' mentality'.''

Back in the valleys, local legend has it that Mr Matthews set up his golf course complex in South Wales in retribution for being refused membership years earlier by the rival St Pierre course.

He denies any such motive, yet says: "They are a bit snobby there, but I had the last laugh. When we were doing our course here with the designer Robert Trent Jones, I drove him there in the Rolls. When we arrived, the staff came running out to meet us. It was almost embarrassing.''

He insists there is no room for sensitivity. Another soundbite runs: "All that bleeding heart emotional stuff isn't really my end of the scale. I'm not even particularly patriotic.''

But sentimentality there is. Why else would he have named Newbridge Networks after his home town, or the original production line after 9 Main Street, the address where he was born, or have Monmouth House as part of the Canadian one, or call an affiliate Crosskeys Systems after another valley town?

He still has a four-leaf clover he collected when he was a child, and one of the golf suites at the Celtic Manor is named after his father, Albert. Some suspect Mr Matthew believes any admission of sensitivity or sentimentality would expose a vulnerable chink in the armour of a man who always wants to be a winner in what he has admitted is a vicious industry.

He also insists he developed the Celtic hotel complex for commercial reasons, not nostalgic ones. He says, the volume of traffic on the nearby M4 and being only 90 minutes from Heathrow convinced him. But, in the same breath, he says the hotel is also on the site of the old hospital where he was born.

Now it's up and running, he's very proud of the place. "I did my best to put up a building you can see from the West End and I didn't come far short,'' he says.

The hotel is more grandiose than some of his soundbites. Built by a workforce of more than 700, it has 400 beds, four restaurants, a 1,500-seat conference centre, and two health clubs as well as the golf courses. There are presidential suites with grand pianos and butler accommodation, and in the conference room the special joists are strong enough to allow cars to be suspended from the ceiling, presumably in case Mr Matthews cares to bid for the Motor Show.

Rumour has it that he had as much to do with the design of the place as the professionals he hired, and his private jet was a regular sight at Cardiff, as was his Bentley, during planning and building.

In fact, Mr Matthews has said he would probably have been a builder in the pre-computer age.

"I like building things,'' he says. "In the past, I'd probably have been a master mason, maybe working on sharpening up the Pyramids. And I could have built the Pyramids a lot quicker than they did, you know." Who would argue?